What room for com­pro­mise?

Con­cerns break­away party means more power for labour

Finweek English Edition - - News -

AS DIS­GRUN­TLED ANC LEADERS – led by for­mer De­fence Min­is­ter and ANC chair­man Mo­siuoa Lekota – pe­ti­tioned com­pa­tri­ots to join them in a bid to start a break­away party, those who re­sisted raised con­cerns that an ex­o­dus of “sober-minded in­di­vid­u­als” will give the rul­ing party’s labour unions and SA Com­mu­nist Party (SACP) al­liance part­ners even more pull to chart a rad­i­cal new course for South Africa’s macro-eco­nomic pol­icy.

The break­away idea was mooted at a press con­fer­ence ad­dressed by Lekota last Wed­nes­day, as yet an­other resched­uled date was be­ing set for the tri­par­tite al­liance’s much an­tic­i­pated eco­nomic sum­mit, which will be the back­bone of the ANC’s elec­tion man­i­festo and, there­fore, Gov­ern­ment’s eco­nomic pol­icy af­ter next year’s elec­tion.

Em­bold­ened by their new­found po­lit­i­cal clout, the ANC’s left­wing part­ners have sub­stan­tial plans to put on the ta­ble. Ref­er­ences to the cur­rent global fi­nan­cial melt­down jus­tify their calls for rev­o­lu­tion­ary struc­tural change that es­sen­tially trans­fers con­trol of eco­nomic de­ci­sion-mak­ing from pri­vate to State hands. The doc­u­ments pre­pared for the sum­mit and (in Cosatu’s case) en­dorsed by a group of un­named “pro­gres­sive” economists, are clear: there’s no room for com­pro­mise.

“In­ter­na­tion­ally, it’s now widely ac­cepted that the es­sen­tially neo-lib­eral eco­nomic pol­icy pre­scrip­tions on which our Gov­ern­ment mod­elled its eco­nomic strat­egy in 1996 have failed and have been thor­oughly dis­cred­ited,” says a Cosatu dis­cus­sion doc­u­ment pre­pared for the sum­mit.

Ex­plain­ing Cosatu’s “Walk­ing through doors project” – which can­vassed opin­ion from a group of un­named “pro­gres­sive” economists about the di­rec­tion of SA’s econ­omy – Cosatu chief Zwelinz­ima Vavi warns: “A con­tin­u­a­tion of this (the cur­rent) ap­proach will lead to our Gov­ern­ment be­ing pun­ished both by cap­i­tal and its own mass con­stituency. The im­por­tant po­lit­i­cal shifts that have be­gun post-Polok­wane have now cre­ated the space to start to en­gage far more boldly in eco­nomic strate­gies that in­ter­vene de­ci­sively to de­velop so­lu­tions to prob­lems in the real econ­omy.”

The Cosatu/SACP eco­nomic in­ven­tory of re­quire­ments is pro­foundly anti-glob­al­i­sa­tion. They in­clude sen­ti­ments about na­tion­al­is­ing (Sa­sol and steel pro­ducer ArcelorMit­tal), “dis­ci­plin­ing cap­i­tal” and plans for State min­ing houses, tar­iff bar­ri­ers and pro­tec­tion for strug­gling in­dus­tries.

De­spite ANC sec­re­tary gen­eral Gwede Man­tashe’s as­sur­ance there will be “change and con­ti­nu­ity”, he con­cedes the cur­rent tra­jec­tory (where poverty and un­em­ploy­ment are grow­ing) isn’t in busi­ness’s in­ter­ests. He says the pol­icy de­bate is about tweak­ing what needs to be tweaked, over­haul­ing what needs to be over­hauled and hav­ing an in­formed (de-politi­cised) de­bate about where State and pri­vate bound­aries need to be­gin and end.

It’s ex­actly the need for bal­ance that has stopped many dis­grun­tled ANC leaders from leav­ing the party. This group ar­gues that an ab­sence of al­ter­na­tive voices in the party will give hard­lin­ers too much space. There­fore, it comes as no sur­prise some an­a­lysts and busi­ness leaders say a break­away party by moderate leaders (such as Lekota) in the ANC could leave the rul­ing party’s pol­icy di­rec­tion in the hands of its labour al­lies.

Ray­mond Par­sons, over­all busi­ness con­vener at Ned­lac and eco­nomic con­sul­tant to Busi­ness Unity South Africa, warns the cur­rent global fi­nan­cial may­hem means that in chart­ing its eco­nomic pol­icy course, SA’s “mar­gin for er­ror and ex­per­i­men­ta­tion has shrunk”. There’s lit­tle choice but to toe a sen­si­ble line. Says Par­sons: “SA is more vul­ner­a­ble than ever. The few hours when mar­kets thought Fi­nance Min­is­ter Trevor Manuel had re­signed pro­vided a test tube case – a glimpse into what can hap­pen if mar­kets turn sour on you be­cause wrong eco­nomic de­ci­sions are pos­si­ble.”

Whether the con­cerns of Par­sons mean the pol­icy de­bate should be in­flu­enced by mod­er­ates in­side the rul­ing party is moot. So­ci­ol­o­gist Ash­win De­sai cau­tions against broad brush­stroke ar­gu­ments that are ei­ther for or against the Mbeki regime’s poli­cies and their suc­cess or fail­ure rates. He ar­gues that both ar­gu­ments miss what the real prob­lem is: a State in­ca­pable of im­ple­ment­ing pol­icy op­ti­mally.

Giv­ing an in­ef­fi­cient pub­lic ser­vice more to do by way of State in­ter­ven­tions is as much a sinker as Mbeki’s sta­bil­is­ing and sen­si­ble macro-eco­nomic poli­cies that were, thanks to a lethar­gic bu­reau­cracy, un­able to trans­late the good times into ac­cel­er­ated de­liv­ery. That may be true at one level but doesn’t de­tract from the fact that a very decisive pol­icy shift is on the cards.

The ques­tion is whether there are rea­son­able grounds for leav­ing the ANC to a left­wing rump by break­ing away. Some ANC mem­bers lament the fact there’s no room for de­bate. “The win­ners in­tend to con­tinue the trend of tak­ing all,” says one ANC MP.

Lekota agrees, say­ing: “There’s been a daily weed­ing out of peo­ple who make the fa­tal mis­take of ex­press­ing them­selves.”

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